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Competition Analysis of Google with others in Advertising Revenue generated online
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Anurag Verma : 35413
Amol Surwade : 35407
Sushant Jog : 35481
Gooooogle
IndustryGoogleGoogle SWOT AnalysisGoogle Porter Five Forces Model
FacebookFacebook SWOT AnalysisFacebook Porter Five Forces Model
Competitive AnalysisQnA 2
Agenda
Online AdvertisingRevenue Generation through Free ProductsRevenue Generation through Search Engine Marketing
Revenue Generation through Social Media
3
Industry
Started in January 1996 by Larry Page and Sergey Brin – Stanford University Ph.D. Students
Domain name registered on September 15, 1997, and the company was incorporated on September 4, 1998.
The company's mission statement
"to organize the world's information and make it universally accessible and useful“
4
About Google
Name Microsoft Corporation
Geographic Areas Covered WorldWide
Headquarter U.S.
Current CEO Satya Nadella
Employees 99,000
Major Competitors Google, Apple, IBM, Oracle, Adobe etc
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About Google
6
About Google
What does Google do to sustain
SWOT Analysis
Strengths weaknesses
Opportunities Threats
Free products in multiple categories
Web Web Searching, Google Chrome, Toolbar
Mobile Mobile, Maps for Mobile, Search for Mobile
Media YouTube, Picasa, Image Search, Books, News
Home & Office Gmail, Docs, Calendar, Google Drive, Translate, Calendar
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SWOT Analysis : STRENGTHS
Free products in multiple categories Social
Hangout, Google+, Blogger
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SWOT Analysis : STRENGTHS
Access to largest group of internet users worldwide Access to 79% of worlds desktop market users Access to 89% of the world mobile search market users. Increased share in Mobile search
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SWOT Analysis : STRENGTHS
Quality and Customer experience are the primary objects
Strong patent portfolio File more than 1200 patents in 2013 Rank 21st worldwide
Innovation 2nd most innovative company in the world (As per BCG)
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SWOT Analysis : STRENGTHS
Product Integration Products can be used on any OS or any device Well defined Ecosystem
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SWOT Analysis : STRENGTHS
Captialize on Open Source Work / Applications
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SWOT Analysis : STRENGTHS
Increased dominance in Android Market
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SWOT Analysis : STRENGTHS
Financial position
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SWOT Analysis : Strengths
Market Cap 403 billion
Share Price $ 1199 (Approx)
Cash, Cash Equivalent and Marketable securities
$ 56.62 billion
Relies on one source of income More than 90% of revenue from Online Advertising
Market for personal computers is growing slowly. Desktop search engine market will be impacted
Unprofitable Products Patent Litigations
Costly and time consuming. Distract the company from innovating
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SWOT Analysis : WEAKNESSES
Growing no. of mobile internet users More than 90% of revenue from Online Advertising
Patents through Acquisitions. Got 17000 patents from Motorola.
Driverless electronic cars Technology can be a huge hit in future and it can sell licenses to
car manufactures Extremely Fast Internet
Targeting high speed internet speed of 1Gbps in US citities
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SWOT Analysis : OPPORTUNITIES
Growing no. of mobile internet users Less space to place adds Add costs less than usual
AntiTrust Laws Accused by EU for its dominating position in search engine.
Competition from MS, FB, Twitter, Yahoo Windows 8 for Mobile Search engines from Yahoo, MS Add sharing
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SWOT Analysis : THREATS
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Five Forces Model
Competitive
Rivalry with in
Industry
Bargaining Power of Suppliers
Bargaining Power of
Buyers
Threat of New
EntrantsThreat of Substitute
Product
Michael Porter’s Five Forces Model
23
Five Forces Model
Michael Porter’s Five Forces Model
Supplier’s Power
•Google is not a globally dominant•Competition Elimination & Substitution – Microsoft•Google Products may not perform well with new software release frm Microsoft & Apple
Barriers to Entry
•Yahoo & Microsoft have radically improved their search engines•Online Marketing governing rules are still evolving which may affect Google’s Strategy
Competitive Rivalry
•Rules /Ethics have not been defined so the environment is easily exploited or manipulated•Currently there are multiple rivals (Microsoft, Yahoo, facebook etc.) so the degree of rivalry is more oriented to an oligarchy•Brand identity – Google has made the language as a noun and a verb
Threat of Substitutes
•High. Switching costs are negligible•Technology requires extremely skilled staff – high degree of competition for a limited pool.•Loss of company/trade secrets if skilled staff more from one search generating organisation to another.
Buyer Power
•Users of the search tool are becoming more sophisticated and demanding other services also for free.
•Substitutes are available – and for the same price: free
•Two client groups – web community wanting to search/locate items and the organisations selling products – have to satisfy both client groups equally.
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Facebook is a social networking website Facebook® was founded in 2004 by Harvard student
Mark E. Zuckerberg with help from his roommates Dustin Moskovitz and Chris Hughes.
Facebook® was originally developed for Harvard students then expanded to other colleges then to anyone over the age of 18, and now currently to anyone 13 years of age or older.
Company Overview:
“Facebook's mission is to give people the power to share and make the world more open and connected.” 25
About Facebook
Facebook’s initial public offering (IPO) less effective than anticipated
Profit earned through B2B advertising services
Businesses benefit through the use of analytical software built into pages
Independently developed applications ensure constant consumer interaction with site
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About Facebook
Name Facebook Inc
Industries Served Internet
Geographic Areas Covered WorldWide
Headquarter U.S.
Current CEO Mark Zuckerberg
Employees 6337
Major Competitors Google, LinkedIn, Yahoo, Twitter
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About Facebook
28
About Facebook
29
About Facebook
In January 2013, the countries with the most Facebook users were: United States with 168.8 million
members Brazil with 64.6 million members India with 62.6 million members Indonesia with 51.4 million members Mexico with 40.2 million members
SWOT Analysis
Strengths weaknesses
Opportunities Threats
Nearly 1200 million active
users
Relevant and unique services, which surpass competitors like
Google+ and MySpace
SWOT Analysis :
STRENGTHS
SWOT Analysis :
STRENGTHS
Date Users (Millions) Growth
August 26, 2008 100 178.38
…… …….. …….
May 30, 2011 700 3.45%
September 22, 2011
800 3.73%
April 24, 2012 900 1.74%
September 14, 2012
1000 2.33%
March 31, 2013 1110 1.5%
Dec 31st, 2013 1230 0.97%
Total Activ
e
users
SWOT Analysis :
STRENGTHS
Financial position
34
SWOT Analysis : STRENGTHS
Market Cap 170.76 billion
Share Price $ 67 (Approx)
SWOT Analysis :
WEAKNESSSES
- Weak CTR of advertisements
- Lack some features such as video chat, dislike button, group chats etc
- Lack of website customization
- Lacks proven effectiveness in advertising in PC version
- Constantly drawn into litigation due to patent and privacy violations
- Fails to take advantage of mobile version to draw revenue
Mobile Ads
Retail Platfor
m
Internal Payment System
SWOT Analysis :
OPPORTUNITIES
SWOT Analysis :
OPPORTUNITIES
• Mobile advertising
o Based on current analytic software on PC versions
o Larger return for advertisers
o Greater investor strength for Facebook
SWOT Analysis :
OPPORTUNITIES
• Retail service integration with social analytics
o Current analytics can contribute to consumer purchases
o Large consumer base will lead to stronger feedback on products
Google’s growing social network application
Privacy concerns may drive away current consumers
As market saturation draws closer, expansion will slow
SWOT Analysis : THREATS
SWOT Analysis : THREATS
Facebook blocked in China, Iran, Pakistan, Syria, Uzbekistan in 2007, 2008, 2009
Weak business model
44
Five Forces Model
Competitive
Rivalry with in
Industry
Bargaining Power of Suppliers
Bargaining Power of
Buyers
Threat of New
EntrantsThreat of Substitute
Product
Michael Porter’s Five Forces Model
Five Forces Model
Threats of new entrantsVery LowGoogle+ is the only competitor
Five Forces Model
Threat of substitutesModerate. Recently acquired WhatsappNot much threat from SkypeAdvertising
Five Forces Model
Bargaining power of CustomersSignificant Power (Since Google may have
same customers)
Five Forces Model
Bargaining power of SuppliersSignificant Power (Since Users are also its
suppliers)Influence of Telcos
Five Forces Model
Intensity of Competitive RivalryVery LowNot major players who has that much of
strong presenceG+ has 1/10th Monthly Active Users only
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Analysis
No. of Users Capabilities Strategy
Facebook More than 1billion monthlyactive users
With more than1 billion users indatabase, userscan connect inbetter ways.
Facebook markets themas a platform that allowsusers to connect.
Google+ An estimated343 millionmonthly activeusers.
G+ integratesyoutube andandroid to gaincompetitiveadvantage overFacebook.
G+ markets them as anextension to otherservices(gmail,search,videosharing youtube ,photosharing - picasa) itprovides.
Facebook Revenue
$3,000
$2,500
$2,000
$1,500
Facebook Advertising Facebook Other Revenue
$241
$218
$214
$256 $213
$1,000
$500
$0
$188
$943
Q4 2011
$186
$872
Q1 2012
$176 $192
$992 $1,086
Q2 2012 Q3 2012
$1,599
$1,329 $1,245
Q4 2012 Q1 2013 Q2 2013
$2,344
$1,798
Q3 2013 Q4 2013
Google Revenue
$18,000
$16,000
$14,000
$12,000
Google Advertising
$666
Google Other Revenue
$1,647
$1,230 $829 $1,049 $1,046
$10,000
$8,000
$6,000
$4,000
$2,000
$0
$410 $420
$10,174 $10,225
Q4 2011 Q1 2012
$439
$10,525 $10,860
Q2 2012 Q3 2012
$12,076 $11,902
Q4 2012 Q1 2013
$14,073
$12,061 $12,542
Q2 2013 Q3 2013 Q4 2013
Facebook v Google - Raw Numbers Facebook Google
$18,000
$15,720 $16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
$10,584 $10,645
$1,131 $1,058
Q4 2011 Q1 2012
$12,905
$11,526 $10,964
$1,585 $1,184 $1,262
Q2 2012 Q3 2012 Q4 2012
$12,951
$1,458
Q1 2013
$13,772 $13,107
$2,585 $1,813 $2,016
Q2 2013 Q3 2013 Q4 2013
Quarter By Quarter Change 35%
Facebook Google30%
25%
20%
15%
10%
5%
0%
-5%
-10%
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Q4 2011 - Q4 2013 Change
Facebook Google
129% 49%
Advertising Other
Revenue Advertising
Other Revenue
149% 28% 38% 302%
Revenue Post-IPO
Facebook Advertising Facebook Other Google Advertising Google Other $3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
Q1 Q2 Q3 Q4 Q5 Q6
Quarters since respective IPOs
Advertising Revenue
Methods
PPC (pay per click)-
When any one visit your website and make any click on Advertisement, website owner (You) get Rs 10, 12, 15… per click
PPL (pay per Lead)-
When any one visit your website and make a click and signup in any Advertisement, You get Rs 20, 30, 40… per click
PPA (pay per Action)-
When any one visit your website and Does any shopping from the Advertisement, You get X% commission on that shopping
PPI (pay per Impression)-
Some Advertisers want their Brand logo should be seen by visitors on your website, Still they will Pay Rs 10 for 100 visitors, Rs 50 for 500 visitors
Thank You
Gooooogle
